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THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE

BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S.

GOVERNMENT POLICY

Date:

GAIN Report Number:

Approved By:

Prepared By:

Report Highlights:

Demand for high-quality U.S. food and beverage products by the HRI food service sector in Hong

Kong is expected to remain strong. Positive economic growth will drive rising consumer income

and fast-paced lifestyles in Hong Kong that support a thriving restaurant industry. Hotel expansion

is also expected to continue into 2017 leading to greater restaurant demand linked with the strong

inbound tourism. A vibrant catering industry supports growing expansion in the institutional sector.

Post:

Required Report - public distribution

02/23/2016

HK1537

Hong Kong

HRI FOOD SERVICE SECTOR

HRI Food Service Sector Annual 2015

M. Melinda Meador

Chris Li, Annie Lai

Hong Kong

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SECTION I. HONG KONG MARKET PROFILE

Hong Kong has been called Asia’s culinary capital due to its diverse cuisines that includes the full

spectrum of Western and Asian cultures. High-income residents who are accustomed to dining out

at restaurants at every price point and strong numbers of in-bound tourists ready for culinary

adventure are well-served in Hong Kong through its diverse array of high-quality food and beverage

concepts. While future demand may not reflect the rapid increases in the past, demand for quality

food and beverage products in Hong Kong is expected to remain strong.

Hong Kong GDP is expected to continue a positive, though slowing, trend thus providing residents

solid growth in real wages to support consumer spending. However, gains may be offset partially by

rising living expenses as Hong Kong retains its title for the sixth straight year as the most

unaffordable housing market in the world. To better manage these living aspects, daily dining out

patterns are expected to fall to some extent, either less frequent or less expense per meal, which will

see fast food outlets more popular and mid-range restaurants facing some challenges. In addition,

rental price per square foot has risen at the same time as property price psf so cosmopolitan residents

and businesses are considering areas outside of Hong Kong Island, such as Kowloon, outlying

islands and the New Territories, as gentrification and urban development increasingly position these

areas as viable residential areas that attract HRI food service outlets as well.

From 2003-2013, Hong Kong saw tourism grow exponentially, including a 7 fold jump from China,

as modifications in visa requirements allowed more individual mainland shoppers from affluent

cities to visit Hong Kong. However, the number of mainland visitors peaked in 2013 and along

with slower growth in the number of visitors, per capita spending by overnight mainland visitors is

also showing a downturn, according to the Hong Kong Census and Statistics Department.

HRI Food Service Sector

1. Restaurants

Hong Kong boasts around 14,000 restaurants which range from local favorites to 57

Michelin star operations. Macau boasts seven Michelin star restaurants. In 2014,

according to Hong Kong Census and Statistics Department, restaurant receipts grew 3.5

percent year on year, which while positive, is a fall from 5 percent in 2012 and 6.4

percent in 2011.

For Hong Kong statistical purposes, restaurants are grouped into five broad categories:

Chinese, non-Chinese, fast food, bars and other establishments. Hong Kong restaurant

purchases of $4.4 billion in foods and beverages generated sales of almost $13 billion in

2014 representing 2.1 percent and 3.4 percent increases respectively, over 2013. Through

third quarter 2015, restaurant receipts were up 3.5% year on year by value. Receipts were

highest in July, August and September.

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Table 1 – Hong Kong Restaurants Receipts and Purchases (US$ Billion)

2013 2014 Growth (14 vs 13)

Restaurant Receipts 12.44 12.87 3.4%

Restaurant Purchases 4.32 4.41 2.1%

(Source: Hong Kong Census & Statistics Department, US$1=HK$7.8)

Chinese restaurants: Hong Kong’s Chinese cuisine offerings are popular and according

to HK Census and Statistics Bureau, account for the largest amount of receipts amongst

the 5 restaurant categories. A typical lunch at a mid-range Chinese restaurant costs

around HK$150-300 (US$19.23-38.46) per person and a typical dinner costs around

HK$200-450 (US$25.64-57.69) per person. (Source: ATO latest survey on Hong Kong

restaurants’ menus)

Non-Chinese restaurants: Alternatively, Hong Kong consumers and tourists also enjoy

non-chinese cuisine options, including Western, Japanese, Korean, Thai, Vietnamese and

noodle and congee restaurants. A typical lunch at a non-Chinese restaurant may range

from around HK$150-350 (US$19.23-44.87) per person and a typical dinner costs around

HK$250-500 (US$32.05-64.10) per person. (Source: ATO survey)

Fast food outlets: Fast food outlets suit Hong Kong’s quick-paced lifestyle where dining

out twice per day at convenient locations is not uncommon. McDonald’s, KFC and Pizza

Hut are recognized options across the region as are more local chains such as Café De

Coral, Maxim’s and Fairwood that serve both Chinese and western foods. Competition

among fast food chains is intense as brands strive to retain customers and raise brand

awareness. The average meal cost is around HK$35 (US$4.49) for breakfast, HK$50

(US$6.41) for lunch, HK$30 (US$3.84) for afternoon tea and HK$70 (US$8.97) for

dinner. (Source: ATO survey)

To further meet competition, fast food operators are updating outlets and adding new

healthier food options. In 2015, McDonald’s transformed an existing location into a

McDonald’s Next - an elevated concept featuring a glass and metallic interior, mobile-

charging stations, Wifi, self-ordering options and a salad bar, including quinoa - with

table service after 6 p.m. and premium coffee blends.

Bars: Hong Kong’s vibrant night life is renowned and served by more than 1,000 bars,

pubs and other eating and drinking establishments across Hong Kong.

Other Establishments: Coffee Shops: Although tea holds a traditional preference in

Asia, the Asian coffee market has grown an average 4% per annum since 2000, according

to statistics provided by the organizer of the largest food trade show in Hong Kong

(“HOFEX”) and Hong Kong consumers continue to drive an increase in food service

coffee demand. Starbucks operates 145 outlets and Pacific Coffee 122 outlets in Hong

Kong. McDonald’s has been vigorously pursuing market share by expand its McCafe

outlets to 103 of its 238 McDonald’s outlets in the area.

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2. Hotels

Hong Kong hotel expansion continues to rise, but with Hong Kong Island lacking land to

build, new expansions are taking place in non-traditional sites, primarily for up-scale clients,

across the harbor in Kowloon and the New Territories. Dining out and business entertainment

are a vital part of the market for hotel restaurants at every price point.

Table 2 – Hotels, Hostels and Guesthouses in Hong Kong

2013 2014 Growth

Number of hotels/guesthouses 1,043 1,200 +15%

Number of rooms 77,647 81,528 +5%

Room occupancy rate 89% 90% -

(Source: Hong Kong Census & Statistics Department)

With the growth in hotel capacity expected to continue into 2017, demand for high-

quality foods for discerning customers is expected to support additional demand for U.S.

products, such as U.S. beef, chicken, turkey, pork, eggs, fish and seafood products, fruits

and vegetables, processed products and beverages.

A list of Hong Kong hotels are available at:

http://www.hkha.org/en/hotel-information

http://www.discoverhongkong.com/eng/plan-your-trip/accommodation/search/index.jsp

3. Institutions

For restaurant catering, demand in 2015 started strong but softened by the end of the year

as higher wages, a drop in domestic traffic and a softening in fast food demand in heavy

tourist areas combined to reduce overall catering demand. For other institutional outlets,

such as schools, hospitals, and airlines, they are served by a small group of sophisticated

caterers affiliated with the restaurant sector. Caterers often source ingredients from

China where supplies are fresh, inexpensive and abundant, but will use ingredients from

other countries, such as the U.S., when needed for quality and taste.

Schools: Students must eat meals on premises so they either bring their lunch or buy it at

school. According to the Hong Kong Education Bureau statistics (academic year

2014/2015), Hong Kong has 571 primary schools with 329,000 students and 509

secondary schools with 180,000 students. About 70 percent of students buy the school

lunch (meat, rice and some cooked vegetables), generating an annual turnover estimated

at US$250 million. Caterers must register with the Hong Kong Food and Environmental

Hygiene Department (FEHD) to bid tenders provided by individual schools. ATO Hong

Kong can provide a list of school caterers.

Hospitals: The Hospital Authority operates 42 hospitals and medical centers, with a total

of over 27,440 beds and staff size of around 70,000. The catering services for hospitals

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are outsourced on a tender basis. The hospitals are served by catering groups, many of

which also operate restaurants, fast food chains or school lunch catering services.

Airlines: The Hong Kong International Airport is served by three aircraft catering

franchisees:

Cathay Pacific Catering Services

Lufthansa Service Hong Kong Ltd

Gate Gourmet Hong Kong Ltd

The three airline caterers have a combined capacity of 158,000 meals per day, providing

in-flight catering services including preparation and assembly of in-flight dishes, logistics

of food delivery and storage of catering utensils.

Economy

Hong Kong’s economy continued to grow in 2014. GDP and per capita GDP rose by

5.3% and 4.6%, respectively and reached US$288 billion and US$39,758 in 2014.

Table 3 – Hong Kong: Gross Domestic Product and GDP per capita

2013 2014

Growth

14 vs 13

GDP US$273 billion US$288 billion +5.3%

GDP per capita US$38,025 US$39,758 +4.6%

(Source: Hong Kong Census & Statistics Department, US$1=HK$7.8)

Demographics

Hong Kong’s population totaled nearly 7.24 million in 2014. 1.9 million, or 49% of the

total labor force, are women.

Table 4 – Hong Kong: Labor Force Participation

2013 % of Total 2014 % of Total

Labor Force-Men 1.99 million 52% 1.99 million 51%

Labor Force-Women 1.87 million 48% 1.9 million 49%

Total 3.86 million 100% 3.89 million 100%

Imported Foods vs. Domestic Products

Due to limited land resources, Hong Kong relies on imports for over 95% of its food

requirements. According to the Agricultural Fisheries and Conservation Department

2014 statistics, local agricultural production was valued at $106 million, including

$36 million in crop (mainly vegetables), $32 million in livestock, and $39 million in

poultry production. Local production accounted for 1.9 percent of fresh vegetables,

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79.6 percent of live poultry and 6.1 percent of live pigs consumed in the territory.

Due to its central location, free port status and position as a regional purchasing and

distribution center, a significant amount of Hong Kong imports of consumer-oriented

agricultural products are re-exported to the Asian region.

Table 5 – Hong Kong Imports (2010-2014) of

Consumer Oriented Agricultural Products (COAP) & Seafood

Country (in US$ Million) 2010 2011 2012 2013 2014 Growth Share in % of Re-exports

14 v 13 2014 of Gross Imports

World Gross Imports 14,641 17,664 18,166 20,574 22,896 11% 100%

Re-exports 4,404 5,140 5,185 5,587 6,311 13% 100% 28%

Retained Imports 10,237 12,524 12,981 14,987 16,586 11% 100%

United Gross Imports 2,779 3,370 3,450 3,999 4,123 3% 18%

States Re-exports 1,155 1,619 1,476 1,248 1,193 -4% 19% 29%

Retained Imports 1,624 1,751 1,974 2,752 2,930 6% 18%

China Gross Imports 2,205 2,652 3,044 3,439 3,649 6% 16%

Re-exports 380 494 747 1,034 931 -10% 15% 26%

Retained Imports 1,825 2,158 2,298 2,404 2,718 13% 16%

Brazil Gross Imports 1,420 1,650 1,645 2,254 2,544 13% 11%

Re-exports 658 551 540 658 946 44% 15% 37%

Retained Imports 763 1,099 1,105 1,596 1,597 0% 10%

Netherlands Gross Imports 387 666 860 1,150 1,453 26% 6%

Re-exports 91 111 100 129 229 78% 4% 16%

Retained Imports 295 555 761 1,021 1,224 20% 7%

Australia Gross Imports 666 771 812 835 943 13% 4%

Re-exports 84 80 99 123 227 85% 4% 24%

Retained Imports 582 691 712 712 716 1% 4%

France Gross Imports 678 986 815 837 824 -2% 4%

Re-exports 160 215 190 199 233 17% 4% 28%

Retained Imports 517 771 625 639 590 -8% 4%

Thailand Gross Imports 511 568 612 641 783 22% 3%

Re-exports 286 312 358 377 471 25% 7% 60%

Retained Imports 224 256 254 264 312 18% 2%

Iran Gross Imports 366 215 275 247 528 114% 2%

Re-exports 129 103 131 111 198 78% 3% 37%

Retained Imports 237 113 144 136 330 144% 2%

Chile Gross Imports 260 373 425 434 515 19% 2%

Re-exports 181 279 314 284 297 5% 5% 58%

Retained Imports 79 94 110 150 217 45% 1%

Germany Gross Imports 307 435 392 393 514 31% 2%

Re-exports 166 146 131 67 85 27% 1% 17%

Retained Imports 141 289 261 325 429 32% 3%

Total of Gross Imports 9,579 11,686 12,330 14,227 15,876 12% 69%

Top 10 Re-exports 3,291 3,909 4,086 4,230 4,812 14% 76% 30%

Suppliers Retained Imports 6,288 7,778 8,244 9,997 11,064 11% 67%

Total of Gross Imports 5,061 5,977 5,836 6,347 7,021 11% 31%

Rest of Re-exports 1,113 1,231 1,099 1,357 1,499 10% 24% 21%

World Retained Imports 3,948 4,746 4,737 4,990 5,522 11% 33%

(Source: Calculations based on Global Trade Atlas data)

(Retained Imports = Gross Imports into Hong Kong – Re-exports out of Hong Kong)

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Hong Kong is a mature and sophisticated market with a growing demand for high-quality,

high-value foods that is expected to remain positive in the near future. Major import

items included red meats, fruits, poultry meat, seafood and tree nuts.

Thanks to the growing economy and strong demand from local consumers and tourists,

total retained imports of consumer-oriented agricultural products (COAP) and seafood

products in Hong Kong grew by 6% by value in 2014.

The U.S. maintained its position as the largest supplier of COAP and seafood products to

Hong Kong in 2014. Retained imports of these products from the U.S. and China, its

closest competitor in 2014, were US$2.9 billion and US$2.7 billion, representing market

shares of 18% and 16%, respectively.

Hong Kong’s status as a gateway for trade to other regional markets is provides market

opportunities for U.S. high-value food products. In 2014, Hong Kong imported close to

US$23 billion COAP and seafood globally and re-exported 28% of these products.

Among these re-exports, around 19% were U.S. origin products.

Outlook for the HRI Sector in 2015

The outlook for spending on food is less optimistic as poorer performance in 2015 for

some international chains is expected to continue into 2016 with some readjustments,

such as closures and mergers, expected after the Chinese New Year holiday for weaker

operations. Hotel restaurant demand seemed stable in 2015 with little change expected in

2016. Competition will remain keen in this sector as sophisticated, busy, affluent

consumer’s seek high-value, innovative food options. Thus, demand for U.S. agricultural

products, well known in the market as safe, high-quality choices, is expected to remain

stable.

Import Regulations

Duties With the exception of spirits, all food and beverage products are imported to Hong Kong duty free.

Certificates & Permits In Hong Kong, the legal framework for food safety control is defined in part V of the Public Health

and Municipal Services Ordinance and the Food Safety Ordinance. The basic tenet is that no food

intended for sale should be unfit for human consumption. Technical requirements for imports vary

significantly according to the product. Products which require import permits/health certificates

include meat, milk and frozen confections. The HKG accepts import applications from Hong Kong

importers. In other words, local importers and not U.S. exporters are required to apply for import

permits. U.S. exporters need to supply their agents/importers with necessary documentation such as

health certificates from the U.S. government.

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Labeling All prepackaged food products in Hong Kong must comply with Hong Kong’s labeling regulation.

There are also labeling requirements for allergens and nutrients. U.S. labels may not meet Hong

Kong labeling requirements particularly for products with nutritional claims. However, the Hong

Kong government allows stick-on food labels, which could be arranged by Hong Kong importers

with the permission of the manufacturers.

The marking or labeling of prepackaged food can be in either the English or the Chinese language or

in both languages. If both languages are used in the marking and labeling of prepackaged food, the

name of the food, ingredient lists and nutrition information must be provided in both languages.

Labeling for Biotech Food The HKG does not have any specific biotechnology regulations with regard to the labeling of biotech

food products. It makes no distinction between conventional and biotech foods. All are subject to

the same food safety regulation. The HKG continues to promote voluntary labeling of GMO

products as a viable alternative for the trade. The guidelines on labeling for biotech foods, released

in 2006, are advisory in nature and do not have any legal effect. The threshold level applied in the

guidelines for labeling purpose is 5 percent, in respect of individual food ingredient. Negative

labeling is not recommended.

Organic Certification While the Hong Kong Organic Center provides organic certification for local produce, Hong Kong

does not have a law regulating organic food products. U.S. organic products can be sold in Hong

Kong with the USDA organic logo.

Others Under the food ordinances, there are regulations governing the use of sweeteners, preservatives,

coloring matters, and metallic contaminants. The Hong Kong government enforces its food safety

control according to Hong Kong’s food regulations. In the absence of a particular provision in Hong

Kong food regulations, the HKG would draw reference from Codex and/or conduct risk assessments

to determine whether a food meets the food safety standard.

Hong Kong’s first-ever pesticide residue regulation became effective August 2014. Its framework is

largely built on Codex’s standard, supplemented by standards adopted in China, Thailand the U.S.

For details on Hong Kong’s general import regulations for food products, please refer to FAIRS

report.

Table 6 – Hong Kong

Summary of the Key Strengths and Challenges for the Market

Strengths Weaknesses

Hong Kong is one of the top markets in the

world for food and beverages, processed,

fresh and frozen gourmet products.

U.S. food products are not always price

competitive. China is the largest competitor

of U.S. food products.

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Hong Kong is a major trading hub where

buyers make purchasing decisions for a vast

range of consumer oriented products that are

transshipped to China and other parts of Asia.

Transportation time and costs plus product

availability due to seasonality (e.g. fresh

produce) associated with importing U.S. food

and beverage products to Hong Kong can

make them less competitive than products

available in the region or from China,

Australia, and New Zealand (favorable in

terms of location).

U.S. food products enjoy an excellent

reputation among Hong Kong consumers

being renowned for high-quality and food

safety standards.

The importance of Hong Kong as a

transshipment point and buying center for

China and elsewhere is not widely known to

U.S. exporters.

Technical barriers to imports of U.S. products

are generally very low.

Hong Kong labeling and residue standards

differ in some cases, which can impede trade.

A wide variety of U.S. products are available

to Hong Kong consumers (over 30,000

different items).

Numerous Hong Kong food regulations are

not in line with Codex, which can complicate

import clearances.

The link between the Hong Kong Dollar

(HKD) and the U.S. dollar helps insulate the

HKD from currency fluctuations.

While Hong Kong has one of the busiest

container terminals in the world, it also has

the most expensive port handling charges.

In general, implementation and application of

regulations is transparent and open.

Hong Kong’s top supermarkets are a duopoly

that often request slotting fees.

Hong Kong exporters choose to work with

Hong Kong importers and distributers to re-

export products to Mainland China because of

Hong Kong’s dependable legal system,

financial system and rule of law.

Inflation is on the rise in Hong Kong. The

increase in food prices may cause some

consumers to turn to more lower-price lower-

quality food products where U.S. products do

not enjoy strong competitive advantage.

Most trans-shipments to Macau are

purchased, consolidated, and shipped via

Hong Kong.

Demand is increasing rapidly for “healthy”,

high-quality foods, market segments where

the United States is especially strong.

Hong Kong concerns over food safety have

made U.S. food products a top choice for

quality and safety.

Hong Kong’s modern and efficient port

terminal and free port status make it an

attractive destination and for re-exports.

Hong Kong is a “quality” and trend driven

market so price is not always the most

important factor for food and beverage

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purchases.

Hong Kong is a dynamic market with a

sophisticated international community where

new high-quality products are readily

accepted.

Hong Kong is entirely dependent on imports

for meeting its food needs. With continued

economic growth, U.S. HVFB exports to

Hong Kong grew by 11% in 2014 compared

to 2013 and consolidated its position as our

4th

largest market for HVFB products in the

world.

Lack of local production means virtually no

protectionist pressures for food and

agricultural products.

Hong Kong is in an economically stable

region and its economy is expected to grow

by 2% in 2015.

Cold chain and distribution channels for food

products are generally efficient and

dependable, as is the customs clearance

process.

Asia is the fastest growing region for wine

consumption with average per capita

consumption of 5.3 liters/year by 2016 in

Hong Kong. Forecast to consume 4.78

million cases of wine by 2016. In 2012, 54%

of HK wine exports were to mainland China.

SECTION II. ROAD MAP FOR MARKET ENTRY

Exporting and Selling

Since very few hotels, restaurants or institutions import directly from exporters, most

suppliers sell to importers for further distribution to the HRI sector in this market.

Establishing a Business in Hong Kong

If U.S. restaurant chains or caterers want to establish a stronger foothold in Hong Kong, they are

allowed to incorporate freely. However, there are two market entry channels that U.S. companies

may consider in their attempt to establish a presence in Hong Kong’s HRI sector.

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1. Franchising

The concept of franchising has been growing in Hong Kong for the past decade. Nearly

80 % of the franchise operations in Hong Kong are of U.S. origin. Home-grown

franchises have also developed, especially in catering.

2. Joint Ventures

Joint ventures or strategic alliances can be very helpful in entering the market, and are

particularly important in competing for major catering projects.

To attract foreign investment, the HKG established “Invest Hong Kong” to help overseas

companies establish a presence in Hong Kong by providing all the support needed to

establish and expand their operations (www.investhk.gov.hk).

Entering the Hong Kong market with products suitable for the HRI trade can be handled

in a number of ways. Certainly the end customer, the hotel, restaurant, institution or

caterer has an influence on the selection of products or ingredients but the choice is all

very much guided by a network of reliable and trusted suppliers.

3. Setting up a Representative Office

Establishing a representative office in Hong Kong is an effective method that U.S.

companies can use to sell their products to this market. Information on how to set up a

new business in Hong Kong can be found at:

https://www.success.tid.gov.hk/english/bus_sta_up_inf_ser/bus_sta_up_inf_ser.html

4. Appointing Agents

U.S. exporters may consider hiring a local agent. A key consideration is whether the

prospective agent has a good marketing record and widespread distribution

network. Some companies may secure a very competitive price package with TV,

magazine and radio for advertisements. In addition, well-established companies have

extensive distribution networks not limited to the HRI sector but also to retail outlets.

Importers and distributors tend to focus on specific categories of products and end

markets. Research should be carried out to ensure the importer/distributor selected is

appropriate for your products.

Marketing Strategies

Identify key players for the products - ATO Hong Kong can provide lists of importers,

distributors, commodity cooperators and regional business groups.

Test marketing maybe required prior to establishing a presence in the market.

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Communicate product benefits to end-users - although distributors maintain the

relationships with their customers, end users assert influence over the buying

decisions. It is important to directly educate all stakeholders as to the features and

benefits of your products.

Participate in or visit trade shows – Hong Kong has an excellent reputation for hosting

international trade shows. In cooperation with cooperators and regional groups, the shows

demonstrate the versatility and safety of U.S. food products. Some major shows include:

Table 7 – Hong Kong:

Trade Shows Featuring Food & Agricultural Products

Date Name of Show (check the hyperlink below for more details)

Mar 10-12, 2016 LOHAS Expo

May 24-26, 2016 Vinexpo

Aug 11-15, 2016 Hong Kong Food Expo

Aug 31-Sep 2, 2016 Natural & Organic Products Asia

Sep 7-9, 2016 Asia Fruit Logistica*

Sep 6-8, 2016 Seafood Expo Asia

Sep 6-8, 2016 Restaurant and Bar

Nov 10-12, 2016 Hong Kong Int’l Wine & Spirits Fair

(* USDA-endorsed trade shows, more information on USDA-endorsed trade shows can be found at:

http://www.fas.usda.gov/topics/exporting/trade-shows)

Stage menu promotions with major restaurant chains - Menu promotion dollars will be

maximized if spent on promotion events held with the major restaurant chains.

Invite restaurant owners/chefs to seminars and/or to the U.S. - ATO Hong Kong works

collaboratively with representatives to organize seminars and trade missions to the U.S. to

introduce U.S. products, meet U.S. exporters, and experience food service operations in

the U.S.

MAP Program Small to medium-sized U.S. food companies wishing to export their products can get funding

assistance from the USDA Market Access Program (MAP). The reimbursement rates for branded

promotions are equal to the percentage of U.S. origin content of the promoted agricultural

commodity or a rate of 50 percent, whichever is the lesser. If you are a producer or exporter and

want to participate in the MAP, please contact a trade association that represents your specific

product. If no trade association is applicable, please contact one of the four State regional trade

groups: Food Export USA - Northeast (FEUSA), Food Export Association of the Midwest USA

(FEA), Southern US Trade Association (SUSTA), and Western US Agricultural Trade Association

(WUSATA). For details of the MAP program and a list of trade associations, please contact our

office or visit the website: http://www.fas.usda.gov/programs/market-access-program-map

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Market Structure

U.S. Exporter

Importer / Distributor / Wholesaler

Wet Markets

Hong Kong HRI Trade

The market structure for Hong Kong typically involves a dedicated importer/distributor

who deals with the U.S. exporter and maintains relationships with local resellers. Some

special items are imported directly by large hotels, restaurant chains and institutions but

most tend to outsource the import burden.

Hong Kong is a mature trading port and as such has developed an effective network of

importers, distributors and wholesalers that support the HRI trade.

Most major importers/distributors service multiple reseller sectors including HRI/food

service, retail and wet markets.

ATO Hong Kong maintains a database of Hong Kong importers servicing the HRI

trade. For information regarding specific category suppliers, the ATO Hong Kong can

provide additional information.

A partial list of catering franchises in Hong Kong is listed below:

Name of Franchise No. of Outlets

Ajisen-Ramen (catering - Japanese noodles restaurant) 12

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Double Star (catering - coffee shop) 2

Genki Sushi (catering - Japanese restaurant/takeaway 58

Grappa's Ristorante (catering - Italian restaurant) 3 (+ 1 wine bar)

Hui Lau Shan (catering - herbal tea house and health food) 51

Hung Fook Tong (catering - herbal tea house) 82

Jollibee (catering – restaurant) 1

Kentucky Fried Chicken (catering - fast food restaurant) 60

Kung Wo Tong (catering - herbal tea house) 10

Kung Wo Beancurd Products (catering - beancurd drinks and products) 2

Magic House Superstore Ltd (catering - ice cream and snacks) 46

McDonald's (catering - fast food restaurant) 238

Mian Cafe (catering - cafe) 2

Mrs. Fields Cookies (catering – bakery) 19

Pie & Tart Specialists (catering - pie and tart) 13

Pizza Box (catering - pizza delivery) 13

Pizza Hut Restaurants (catering - restaurants) 79

Saint’s Alp (catering – Taiwanese tea house) 5

Strawberry Forever (catering - western dessert house) 1

Yoshinoya (catering - Japanese restaurant) 59

Below is a partial list of restaurants in Hong Kong:

Company Name Type of Food No. of Outlets

Maxims Chinese Restaurants /Western

Restaurants/fast food /bakery 319

McDonalds Fast Food - Burgers 237

(103 McCafe)

Café de Coral Chinese fast food 154

Fairwood Chinese Fast food 117

KFC Fast Food - Chicken 60

Starbucks Coffee & snacks 145

Pizza Hut Pizza, local menu 79

Pacific Coffee Coffee & Snacks 122

Deli France Bakery, Fast Food Sandwiches 25

Steak Expert Steak house 7

Spaghetti House International 17

Epicurean International 14

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Café Deco Group International 30

Lan Kwai Fong Entertainment International 4

Oliver’s Super Sandwich Fast Food Sandwiches / Salads 19

Mix California Smoothies & Wraps 1

Pret a Manger Fast Food Sandwiches / Salads 14

Chiram Restaurants Ltd International 5

Eclipse Management International 12

Outback Steakhouse Australian / American style Steak House 7

Red Ant Chinese 2

Elite Concepts International 6

California Pizza Kitchen American style pizza 4

Dan Ryan’s American Style dining 2

Ruby Tuesday’s American Style dining 6

Burger King Fast Food - Burgers 2

Jimmy’s Kitchen International 2

Ruth’s Chris Steakhouse American Style Steak House 1

Bubba Gump American Style dining 1

Harlan’s International 1

Lawry’s The Prime Rib American Steak House 1

Morton’s the Steakhouse American Steak House 1

SECTION III. COMPETITION

Table 8 – Major Product Categories of Hong Kong’s

Imports of COAP and Seafood Products And Competition

(Note: Trade Statistics for 2014; Market Share in terms of Gross Import Value)

(Source: Global Trade Atlas – Hong Kong Census & Statistics Department)

Product Category Major Supply

Sources**

Strengths of Key Supply

Countries

Advantages and

Disadvantages of

Local Suppliers

Red Meats,

chilled/frozen

Imports

US$5.11 billion

1,492,673MT

Retained Imports

US$4.07 billion

830,036 MT

1. Brazil – 37%

2. U.S. – 24%

3. Germany – 6%

4. China – 5%

Products from Brazil and

China are price competitive,

but they are of different

market segments from U.S.

products.

U.S. market share

dropped from 21% in

2003 to 3% in 2005 as a

result of the ban on U.S.

Local production is

largely on freshly

slaughtered meats.

Page 16 of 24

bone-in beef. Market share

gradually picked up following

Hong Kong’s opening to U.S.

boneless beef since the

beginning of 2006.

U.S. market share further

increased from 15% in 2012

to 24% in 2014 after Hong

Kong re-opened its market for

U.S. bone-in beef.

U.S. beef is highly regarded

in Hong Kong and is the top

choice for high-end

restaurants and sophisticated

consumers. U.S. beef is

largely for the high-end

market.

Red Meats,

Prepared/preserved

Imports

US$1.25 billion

511,205 MT

Retained Imports

US$1.15 billion

443,824 MT

1. China – 28%

2. U.S. – 10%

3. Spain – 6%

4. Poland – 5%

Chinese supplies dominate

the market because there is a

big demand for price

competitive

prepared/preserved meatballs

and other products typical in

Chinese dishes in Chinese

restaurants and processing in

China is cost effective.

Local production is

insignificant.

Poultry Meat

Imports

US$1.67 billion

950,536 MT

Retained Imports

US$864 million

294,043 MT

1. Brazil – 33%

2. U.S. – 29%

3. China – 17%

Brazil remained the leading

supplier of poultry to the

Hong Kong market due to the

price competitiveness of its

products and established

business relationship between

Brazilian exporters and Hong

Kong importers.

Local production is on

freshly slaughtered

meats.

HRI sector tends to use

chilled and frozen

chicken products rather

than freshly

slaughtered chickens

because the latter are

far more expensive.

Dairy Products

Imports

US$1.87 billion

261,872 MT

Retained Imports

US$1.56 billion

233,781 MT

1. Netherlands –

57%

2. New Zealand –

8%

3. Ireland – 6%

4. Australia – 5%

Netherlands is strong in dairy

product supplies and it has an

established position in Hong

Kong.

Dairy products from major

supplying countries primarily

include concentrated dairy

and cream.

Local companies

supply fresh milk

drinks, which are

processed in Hong

Kong with milk

originated from

farmlands in the

southern part of China.

Page 17 of 24

(#12. U.S. – 2%)

Melamine was found in eggs

and dairy products from

China and that has led

consumers to pay more

attention to food safety and

seek high quality products

from other supplying

countries.

Local companies can

easily fulfill local milk

registration

requirements.

Eggs & Egg Products

Imports

US$221million

2.29 billion eggs

Retained Imports

US$216 million

2.25 billion eggs

1. China – 47%

2. U.S. – 23%

3. Thailand – 11%

Eggs from China are price

competitive, however, suffer

from a lack of food safety

confidence by consumers.

The U.S. consolidated its

position as the second largest

eggs supplier to Hong Kong.

U.S. dominates the white egg

markets.

Local production is

insignificant.

Fresh Fruit

Imports

US$2.20 billion

1,613,463 MT

Retained Imports

US$1.07 billion

677,978 MT

1. U.S. – 22%

2. Thailand – 20%

3. Chile – 18%

U.S. fresh fruits are regarded

as good quality.

Thai Trade commission in

Hong Kong aggressively

sponsors trade promotion

activities. Thailand’s tropical

fruits are popular in Hong

Kong.

Chile’s biggest fruit items to

Hong Kong are cherries and

grapes. The supplying season

is different from the U.S.

No local production.

Fresh Vegetables

Imports

US$428 million

806,412 MT

Retained Imports

US$419 million

800,573 MT

1. China –77%

2. U.S. – 7%

3. Australia – 3%

Products from China are very

price competitive. Due to

expensive operation costs in

Hong Kong, some farmers in

Hong Kong have moved their

operations to China and sell

their products back to Hong

Kong.

High-end restaurants and

five-star hotels prefer to use

high- quality U.S. products.

Local production is

about 5 % of total

demand. Production

costs, both in terms of

land and labor, in Hong

Kong are high. The

Hong Kong

Government has

encouraged organic

farming so as to find

the niche market for

local vegetables.

Processed Fruit &

Vegetables

1. China – 37%

2. U.S. – 24%

China is the largest

supplier. Their major items

are dried mushrooms and

Local production is

insignificant.

Page 18 of 24

Imports

US$613 million

244,462 MT

Retained Imports

US$487 million

201,307 MT

3. Thailand – 6%

truffles. China’s products are

price competitive.

Since some international

brands have operations in

China, their exports to Hong

Kong are considered imports

from China.

Tree Nuts

Imports

US$1.66 billion

257,973 MT

Retained Imports

US$940 million

74,946 MT

1. U.S. – 54%

2. Iran – 30%

3. South Africa –

7%

The U.S. is very strong in

supplying almonds, walnuts,

hazelnuts and pistachios.

Some of the imports are re-

exported to Vietnam and

China for processing.

No local production

Wine

(Wines, wine and

sparkling wine)

Imports

US$1.09 billion

52.5 million liters

Retained Imports

US$772 million

30.2 million liters

1. France – 52%

2. U.K. – 11%

3. Australia – 10%

4. China – 9%

5. U.S. – 5%

France is the major supplier

for wine. French wine is

highly regarded in Hong

Kong, though expensive.

U.S. imports of U.S. wine

have shown positive growth.

The Hong Kong Government

abolished the tax on wine in

February 2008. The new

policy has attracted more

wine imports into Hong

Kong.

Hong Kong has

insignificant wine

production.

SECTION IV. BEST CONSUMER ORIENTED PRODUCT PROSPECTS

Notes :

1) 95% of Hong Kong food supplies are imported. Since Hong Kong’s domestic production is

nominal the market size in the following table is equal to retained imports without taking into

account local production. U.S. exports to Hong Kong are also based on imports minus

exports.

2) Import tariff rates for all food and beverage products in the tables are zero except for spirits

with alcohol content greater than 30%, which is 100%.

3) Products listed below either enjoy a large market import value or a significant growth rate for

the last 5 years (2010-2014).

Page 19 of 24

Table 9 – Hong Kong: Top 10 Prospects (** Ranking and figures are based on gross import values)

(Source of data: Hong Kong Census and Statistics Department via Global Trade Atlas)

Product

Category

2014

Retained

Imports

(MT)

2014

Retained

Imports

(US$ million)

2010 – 2014

Average

Annual

Retained

Import

Growth

Key Constraints

Over Market

Development**

Market Attractiveness

For USA**

Fish &

Seafood

Products

159,949 MT US$2.31

billion

-6%

(volume)

-1%

(value)

Major suppliers of fish

and seafood products

are

China (29%), Japan

(14%),

Norway (5%) and

U.S. (5%).

U.S. fish and seafood

products are perceived

as high quality and

safe. Seafood products

are expected to in

demand in the HRI

sector in Hong Kong.

Fresh Fruit 677,978 MT US$1.07

billion

+6%

(volume)

+13%

(value)

Hong Kong

consumers prefer

fresh fruit to

frozen. Competition

from Thailand and

China is keen as these

countries supply

tropical fresh fruit at

competitive

prices. The shorter

travel time for

shipments from these

countries to Hong

Kong also renders

their products

“fresh” to Hong Kong

consumers.

U.S. fresh fruits are well

known for their large

variety, high quality and

good taste.

The U.S. was the largest

supplier (22%) of fresh

fruit to Hong Kong,

followed by Thailand

(20%) and Chile (18%).

Poultry Meat 294,043 MT US$864

million

-6%

(volume)

+1% (value)

Brazil is a strong

competitor for the

U.S. due to price

competitiveness of its

products and

established business

relationship between

Brazilian exporters

and Hong Kong

importers.

Hong Kong import of

poultry products from

the U.S. increased

significantly by 118% in

2014 to US$488 million.

While Brazil was still

the leading supplier, the

U.S. reclaimed market

share from 17% in 2013

to 29% in 2014,

consolidating its position

as the 2nd

largest supplier

of poultry meat to Hong

Kong.

Page 20 of 24

U.S. products are highly

regarded for quality and

safety.

More popular U.S.

chicken products include

chicken wing mid-joints

and chicken legs because

of their size and

quality. These two

products are particularly

popularl among Hong

Kong style cafes.

Pork 267,130 MT US$1.05

billion

0%

(volume)

+12%

(value)

China and Brazil are

the top suppliers of

pork to Hong Kong

because their products

are very price

competitive.

There is a big demand

for price competitive

prepared/preserved

meatballs and other

products typical in

Chinese dishes in

Chinese restaurants,

which are made from

pork. China enjoys

an advantage due to

low processing costs.

Hong Kong imported

US$100 million worth of

pork from the U.S.,

accounting for 8% of the

market share.

U.S. products are highly

regarded for quality and

safety.

Processed

Fruit &

Vegetables

201,307 MT US$487

million

+3%

(volume)

+16%

(value)

China and the U.S.

were the two largest

suppliers, accounting

for 37% and 24%

market share

respectively in 2014.

Some international

brands have

operations in China

and their exports to

Hong Kong are

considered as imports

from China.

U.S. processed fruit and

vegetables are well

known for their superior

quality and taste. U.S.

processed fruit and

vegetables such as

potatoes, nuts, sweet

corn, mushrooms,

peaches and pineapples

will continue to be in

large demand in Hong

Kong.

Beef 461,328 MT US$2.26

billion

+43%

(volume)

+47%

Hong Kong has

allowed full market

access since August

2014. Brazil is a

Hong Kong consumers

have high regard for

U.S. beef in terms of

quality and safety. The

Page 21 of 24

(value) major competitor. re-opening of the Hong

Kong market for U.S.

bone-in beef presents

good opportunities.

Wine

(Wines, wine,

and sparkling

wine)

30.2

million liters

US$772

million

+2%

(volume)

+1%

(value)

Competition is keen in

Hong Kong with

major competition

from France, Italy and

Australia. French wine

has a strong positive

image in Hong Kong.

Hong Kong imported

US$58 million in U.S.

wine in 2014,

accounting for 5% of the

market share.

Hong Kong consumers

are increasingly

receptive to wine.

The HRI sector in

Macau is growing,

making it an excellent

opportunity for U.S.

wine traders to expand

their exports.

Tree Nuts 74,946

MT

US$940

million

-12%

(volume)

+7%

(value)

The U.S. is very

strong in supplying

almonds, hazelnuts

and pistachios.

Some of the imports

are re-exported to

Vietnam and China

for processing.

No local production

Fruit &

Vegetable

Juices

22,271

MT

US$59

million

+4%

(volume)

+25%

(value)

The U.S. is the market

leader. Hong Kong

imported US$39

million worth of fruit

& vegetable juices

from the U.S. in 2014,

accounting for a

market share of 59%.

U.S. fruit and vegetable

juices, such as orange,

apple, grape, grapefruit,

tomato and pineapple

juices are expected to

continue to be popular in

2015.

Organic Food

and Beverage

Statistics not

available

(The size of

the Hong

Kong

organic food

and beverage

market is

estimated at

US$500

Statistics not

available

Statistics not

available

Organic food and

beverage products are

generally 20-40%

higher in prices

compared to non-

organic products.

There are many

organic standards in

the market and the

poor quality of a

As Hong Kong

consumers are becoming

more health-conscious,

the demand for organic

products is expected to

grow in 2015.

USDA Organic enjoys

an excellent reputation

among consumers in

Hong Kong.

Page 22 of 24

million, with

an annual

growth of

10-15%)

country’s organic

products may

negatively affect the

image of organic

products from all

supplying countries.

Grain products,

soybeans, cereals, oats,

noodles…etc. are in

good demand.

Other products such as

organic meat (beef and

pork), condiments,

poultry, eggs etc. are

starting to have more

interest in the market.

There is also a strong

demand for organic

vegetables and fruits,

organic coffee and tea

products.

SECTION V. KEY CONTACTS AND FURTHER INFORMATION

Post Contact Foreign Agricultural Service (FAS)

Home Page: http://www.fas.usda.gov

Agricultural Trade Office

American Consulate General

18th

Floor, St. John’s Building

33 Garden Road, Central

Hong Kong

Tel: (852) 2841-2350

Fax: (852) 2845-0943

E-Mail: ATOHongKong@fas.usda.gov

Web site: http://www.usconsulate.org.hk

http://www.usfoods-hongkong.net

Department to Implement Food Safety Control Policy Food & Environmental Hygiene Department

43rd

Floor, Queensway Government Offices

66 Queensway

Hong Kong

Tel: (852) 2868-0000

Fax: (852) 2834-8467

Web site: http://www.fehd.gov.hk

Email: enquiries@fehd.gov.hk

Page 23 of 24

Hong Kong Federation of Restaurants and Related Trades

Flat A, 7th

Floor, Draco Industrial Building

46 Lai Yip St., Kung Tong

Kowloon

Hong Kong

Tel: (852) 2523 6128

Fax: (852) 2523 2638

Email: hkfort@netvigator.com

Website: www.hkfort.gov.hk

Department to Control the Importation of Plants & Live Animals

Agriculture, Fisheries & Conservation Department

5th

– 8th

Floor, Cheung Sha Wan Government Offices

303 Cheung Sha Wan Road

Kowloon

Hong Kong

Tel: (852) 2708-8885

Fax: (852) 2311-3731

Web site: http://www.afcd.gov.hk

Department to Issue License for Imported Reserved Commodities Trade & Industry Department

18th

Floor, Trade Department Tower

700 Nathan Road

Kowloon

Hong Kong

Tel: (852) 2392-2922

Fax: (852) 2789-2491

Web site: http://www.tid.gov.hk

Department to Register Health Foods Containing Medicine Ingredients Department of Health

Pharmaceuticals Registration

Import & Export Control Section

18th

Floor, Wu Chung House

213 Queen’s Road East, Wanchai

Hong Kong

Tel: (852) 2961-8754

Fax: (852) 2834-5117

Web site: http://www.dh.gov.hk

Department to Issue License for Imported Dutiable Commodities Hong Kong Customs & Excise Department

Office of Dutiable Commodities Administration

6th

- 9th

Floors, Harbor Building

Page 24 of 24

38 Pier Road, Central

Hong Kong

Tel: (852) 2815-7711

Fax: (852) 2581-0218

Web site: http://www.customs.gov.hk

Department for Trade Mark Registration Intellectual Property Department

Trade Marks Registry

24th

and 25th

Floors, Wu Chung House

213 Queen’s Road East

Wan Chai, Hong Kong

Tel: (852) 2803-5860

Fax: (852) 2838-6082

Web site: http://www.ipd.gov.hk

Semi-Government Organization Providing Travel Information Hong Kong Tourist Board

9th

- 11th

Floors, Citicorp Center

18 Whitfield Road, North Point

Hong Kong

Tel: (852) 2807-6543

Fax: (852) 2806-0303

Web site: http://www.hktourismboard.com

Semi-Government Organization Providing Hong Kong Trade Information Hong Kong Trade Development Council

38th

Floor, Office Tower, Convention Plaza

1 Harbor Road, Wan Chai

Hong Kong

Tel: (852) 2584-4188

Fax: (852) 2824-0249

Web site: http://www.tdctrade.com